Exactly what qualities it takes to build a business empire can to a certain extent be discerned in this masterful biography of W.L. Baillieu by well-regarded Melbourne University historian Peter Yule.

Baillieu did not crash and burn like the so-called entrepreneurs of the 1980s, whose houses of cards collapsed after the 1987 crash.

John Spalvins and Christopher Skase never recovered. The irrepressible Alan Bond rediscovered some sort of fortune after the shame of a jail sentence for looting Bell Group of $1 billion. Robert Holmes à Court, who as a solicitor no doubt counselled many clients about the difficulties that dying intestate would cause one’s heirs, did just that.

True, Baillieu was one of Marvellous Melbourne’s highest-flying land-boomers and he did crash. But one must understand why his “secret composition” of sixpence in the pound was not such a bad deal for creditors. In those days, shares were customarily issued at a value of one pound, paid to sixpence.

In the event that more capital was needed, a call would be made on the shares, of, say, sixpence. In the event that the company could not meet its obligations, the unfortunate shareholders could be called on to pay the outstanding 19 shillings and sixpence. They were legally obliged to meet the call. When people talk of “secret compositions”, that is primarily what they are talking about — the inability to meet calls for the outstanding capital.

Investors of some standing will remember “NL” companies. The “NL” stands for “no liability”. Following the disasters inflicted on investors by partially paid shares in the 1890s, the NL company came into existence so shareholders were not legally liable to pay calls.

W.L. Baillieu certainly showed mountains of “vision”, that quality so beloved of the entrepreneurs; but he showed entire dividing ranges of thrift, application, business acumen and sheer hard work. That helped him crawl out of the hole that the “Hungry Nineties” made in Melbourne’s business environment; many others did not.

W.L. Baillieu’s empire was housed in 360 Collins Street, Melbourne. The web of companies W.L. Baillieu influenced or created included the Carlton and United Breweries, Associated Pulp and Paper Mills, Conzinc Rio Tinto Australia, Electrolytic Zinc, Broken Hill South, North Broken Hill, the Sons of Gwalia and many others. Now 360 Collins Street is the Victorian HQ of Westpac Banking Corp, a Sydney company.

He was one of the first Australian financiers to realise the importance of having direct representation in London, the world’s financial capital, to tap international capital markets for Australian projects. This helped overcome what Geoffrey Blainey so famously called “the tyranny of distance”. It also played into the peculiar phenomena that the farther you are away from a mine the better it looks.

Baillieu certainly took risks. He was a courageous short-seller. Short-selling involves selling a share before you own it. If you buy a share outright, your losses are limited to the capital you have tied up in your share. Because a short-seller can be forced to “cover” when a stock goes up, instead of down as he anticipated, his losses are potentially limitless.

Short-selling takes nerves of steel. W.L. Baillieu had nerves of steel in spades.

What made W.L. Baillieu do what he did?

His biographer says: “W.L. was not motivated primarily by personal wealth or power, although he achieved both. Rather he was driven by loyalty and responsibility to his family. He used his exceptional talents and abilities to care for his parents, his parents-in-law, protect his brothers from the worst consequences of the crash of the early 1890s, aid his older brothers in their personal and financial troubles, create careers for his younger brothers and support his sisters until they married (and then some of their husbands)” (p.81).

W.L. Baillieu sat in the Victoria’s parliamentary upper house, the Legislative Council. Today his grandson Ted sits in Victoria’s lower house, the Legislative Assembly, and is state premier.

W.L. was regarded as being something of a progressive, as is his grandson. W.L. sought, for example, to widen the restrictive franchise of the Legislative Council at a time when its members saw themselves as acting as a restraint on the undisciplined lower house.

W.L. sought to be “businesslike” in his political dealings but had few illusions that a few well-placed words could work wonders in politics, as in business.

This biography is a fine work of practical history. Dr Yule has used his material well, aided by the fact that the Baillieus have conserved a great deal of archival material concerning their family.

It is not the role of a biographer to act as an advocate for his subject, but Yule has countered with facts and evidence a great deal of material that can only be called speculative. W.L. Baillieu was a businessman of rare talent and acumen and was also, insofar as we can judge, largely fair and ethical.